December 3, 2020: Pakistan Credit Rating Agency (PACRA) has upgraded the Entity ratings of Panther Tires Limited, with a stable outlook forecast.
The company’s Long-Term Entity Rating was said to be upgraded to “A” from the previous rating of A- (A minus), while its Short-Term Rating was upgraded to A1 (A one) from the previous rating of A2 (A two).
As per the rating agency, Panther Tyres Limited has built strong brand equity. In an industry, which is volume driven and price sensitive, brand name provides inherent strength. This has enabled the company to sustain its market share.
Panther Tyres has strong positioning in its respective niches. The company has a formidable market share in 2 & 3-wheeler tyres, tractor tyres, and tubes segments.
The company has recently expanded its product range and introduced two new types of tyres which are related to trucks and buses and earth movers (caterpillar). The company has received favorable market response in these new segments.
The distribution network designed along product lines and nature of segment plus longstanding relationships with Original Equipment Manufacturers (OEMs) are of crucial help. The sponsors have built a strong management team with a wholesome mandate: roles are clearly demarcated with high degree of delegation. The new leadership from the sponsor side is in full control.
The company has improved its overall organization structure and is inculcating financial transparency as per Code of Corporate Governance. Further, role of chairman and CEO has been segregated and four new directors including 3 independent directors have been elected on the board to strengthen the governance of the company.
All in all, the company is poised for listing. Revenue stream is segmented into OEMs and Replacement Markets (RM), wherein (RM) has a higher inclination. The company's financial risk profile is demonstrated by stable margins, healthy coverages and adequate capital structure.
Despite Covid19 outbreak with associated lockdown period the company managed to sustain its growth in revenues and margins during FY20 and 1QFY21 which show consistency in growth.
Export side of the company is gradually escalating, currently the company exports 2, 3 & 4 wheeler tyres to 12 countries in the world. The management believed that grey channels are curtailed thus demand from replacement market is expected to rise in future which will be complemented through planned capacity expansion, whereas the OEMs demand will be subject to multiple challenges.
The ratings are dependent on the management's ability to sustain its business profile with cautious management of market risks, increase in international outreach and improvement in governance structure.
December 3, 2020: Adviser to the Prime Minister on Finance and Revenue, Dr. Abdul Hafeez Shaikh chaired the meeting of the Economic Coordination Committee (ECC) of the Cabinet in Islamabad today. Minister for Privatization Muhammad Mian Soomro, Minister for Economic Affairs Makhdoom Khusro Bakhtiar, Minister for Railways Sheikh Rashid Ahmed, Adviser to the PM on Commerce Abdul Razak Dawood, SAPM on Revenue Dr. Waqar Masood, SAPM on Power Tabish Gauhar and Adviser to the PM on Institutional Reforms and Austerity Ishrat Hussain participated in the meeting. Governor State Bank of Pakistan Dr. Reza Baqir joined the meeting through video link.
The Power Division presented the case for abolishment of Time-of-Use tariff scheme for Industrial consumers to spur industrial activity amid COVID-19 pandemic by removing the distinction between the current system of peak and off-peak hours as a part of Industrial support package. The underlying rationale is to incentivize industrial units to operate round the clock and produce greater output during testing times.
Consequently, ECC accorded approval, in principle, to the proposal regarding amendment in the respective SROs both for the XWDISCOS and K-Electric to charge the off-peak rates against the peak hours. The abolishment of peak and off-peak tariff structure would be implemented w.e.f. 01 November 2020 till 30 April 2021.
Dec 03, 2020: The Sui Southern Gas Company (SSGC), which is mainly responsible for supplying gas in Sindh and Balochistan provinces, has evolved an effective strategy to meet the increased commodity demand during the peak winter season by injecting additional RLNG in its transmission network.
“This year, around 160 MMCFD (Million Cubic Feet per Day ) gas is expected to be short supplied from the fields and the SSGC will face [overall] shortage of around 250-300 MMCFD gas this winter. This shortfall will be met by injecting RLNG in the system,” according to an official document available with APP.
During the last winter, the SSGC was getting an average 1,145 MMCFD gas supply from its 25 operational fields, which has reduced to 985 MMCFD in 2020-21 due to depletion of the hydrocarbon deposits, curtailing the supply by 160 MMCFD gas.
Keeping in view the increased gas demand, the company has started implementing its winter plan as 200 MMCFD Regasified Liquefied Natural Gas (RLNG) has already been injected in the system.
Besides, it commenced work on laying a 17-Kilometer pipeline after getting Right of Way (ROW) from the Sindh government, for which the federal government had been requesting for the last one-and-a-half years.
The 30-inch dia pipeline would be laid from the Custody Transfer Station (CTS) of RLNG at the Bin Qasim [Qasim Port Karachi] to Sales Meter Station Pakland where the SSGC transmission network is available for injecting the RLNG.
Currently, as many as two LNG terminals were operating in the country having capacity to inject around 1200 MMCFD gas in the national transmission system, which helped in bridging the gap between demand and supply of the gas to great extent.
Pakistan's indigenous gas production is around 3.7 Billion Cubic Feet per Day (BCFD) against the demand of 6 BCFD, while the existing reserves are depleting at the rate of 9.5 percent annually and unfortunately oil and gas Exploration & Production companies made no significant discovery since long.
Realizing the present and future needs of gas, the government is encouraging private sector players in the LNG business under its ease-of-doing-business plan.
The strategy has started yielding good results as two multinational companies are planning to start physical work on setting up their LNG terminals during next few months, while another local company is flexing muscles to start import of the commodity at the earliest.
December 03, 2020 (MLN): Pakistani rupee (PKR) appreciated by 30 paisa against US Dollar (USD) in today's interbank session as the currency closed the day's trade at PKR 160.17 per USD, against yesterday's closing of PKR 160.46 per USD.
The rupee saw a volatility free session as very little movement was recorded trading in a range of 59 paisa per USD showing an intraday high bid of 160.65 and an intraday Low offer of 160.15.
Within the Open Market, PKR was traded at 160.4/161.5 per USD.
Alternatively, the currency lost 5 paisa to the Pound Sterling as the day's closing quote stood at PKR 214.59 per GBP, while the previous session closed at PKR 214.54 per GBP.
Similarly, PKR's value weakened by 80 paisa against EUR which closed at PKR 194.2 at the interbank today.
On another note, within the money market, the overnight repo rate towards close of the session was 6.75/7.00 percent, whereas the 1 week rate was 6.95/7.00 percent.
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December 03, 2020 (MLN): Foreign Investors during the week ended November 27, 2020, took out net amount of Rs. 1.57 billion by selling of local securities, whereas last week, the accounts observed a net purchase of Rs.45.12 million
According to a weekly report on Specially Convertible Rupee Accounts (SCRA) released by the State Bank of Pakistan, the gross sale of securities during the week was recorded at Rs.6.6 billion, which is around 8.5 percent lower than the figures recorded last week. Similarly, the total purchase of securities stood at Rs.5 billion, which is 30.7 percent lower than the prior week.
Over the week, the overall purchase of securities declined by Rs.2.22 billion while the net sale of securities tumbled by Rs.611.64 million.
Apart from this, the inflow of remittance into these accounts stood at Rs.1.32 billion, while its outflow has been reported at Rs.2.8 billion.
The closing balance of SCRA was recorded at Rs.28.97 billion, which marks a rise of Rs.341.62 million over the week.
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